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DRAFTING "THE DLT ACT OF 2021"
DISTRIBUTED LEDGER TECHNOLOGIES ("DLT'S")
Digital ledgers use algorithms to cryptographically facilitate the transfer of assets. The world is moving in a direction that appears to be the beginning of a revolution in digitizing financial instruments and allowing transactions to be negotiated over peer-to-peer networks. The Distributed Ledger Technologies (“DLTs) will transform the financial and commercial industries around the world. While it is also likely that DLTs will interface with many existing platforms in commercial transactions, many legal regimes are agonizingly slow in dealing with the challenges of advancing social and public policy objectives in a digitized environment.
The launch of Bitcoin in 2009 empowered developers to instantly transact in digital currency on a peer-to-peer basis across continents at a trivially low cost. Behind the Bitcoin idea was the creation of the Block chain, which enabled the innovation of digital ledgers that could cryptographically verify the creation and the transfer of digital assets. The nextgeneration DLT is the Tangle, which now undertakes to decentralize every “Internet of Things” connected device. See Sergui Popov, “The Tangle” (2016) White Paper. For the online version see the following link: https://iota.org/IOTA_Whitepaper.pdf
Will we depend on these technologies in the future and will they transform the standards in the sale of goods, services and assets without the need to use intermediaries? Some scholars argue that our world is evolving so dramatically that people will execute contacts and automatically transfer assets, invest in projects without the need for fund managers or bureaucratic institutions and even settle contract disputes electronically without resort to protracted court litigation in certain countries. The existing physical boundaries of nations will come crumbling down because business transactions will bypass centrally controlling authorities. National Tax Reforms will become difficult to manage due to the lack of income data that may be cryptographically hidden, despite the transparency of the digitized currency. For example, Zcash uses cutting-edge cryptography to make peer-to-peer money transactions secure without being publicly viewable. See https://z.cash/about.html?page=0
From the Government regulatory point of view, public policy objectives must be advanced in a transforming commercial world when the very nature of regulation is hindered by multiples of time factors. Government regulators are often stifled by innovation as they must deal with a slow moving process that balances competing interests often steered by political ideology. The technology revolution following the creation of Block chain will continue to expand rapidly in all facets of commercial enterprises and 3 governments must consider regulatory mechanisms that will promote the public policy objectives sooner than later.
ASSIGNMENT FOR LAW STUDENTS
Each Law School shall prepare draft legislation titled “The DLT Act of 2021”. The proposal shall include Model Law Type provisions for the Regulation of DLTs and arguments for or against each section. Use any legislative acts from different countries that may have been enacted on the issue of DLTs. Law Students will draft their argument sections for or against each provision under the following COMPETING INTERESTS:
(1) Sofos Tech Stiffler is the Attorney General of the Government of the United Commercial Countries (“UCC”), a rapidly growing cluster of 50 nations. The President of UCC was recently elected on an agenda of deep reforms, including the reduction of taxes, increase of revenues from business and the social discontent with the proliferation of several DLTs that have been allegedly hindering the collection of revenues. The President of the UCC Parliament has asked Sofos Tech Stiffler to draft legislation that will regulate the DLTs. The task is to effectively end the online drug or weapons bazaars or other marketplaces for the sale of illegal items, including diamonds; human trafficking networks; terrorist financing and communications networks but most importantly tax evasion schemes. The draft legislation will be debated in the upcoming Parliament session of 2019 and the President wants the Parliament to vote on the proposed legislation so that he can sign it into law immediately. The President believes that the development of DLTs has significantly reduced the revenues of UCC over the last 10 years and there is a lot of public discontent over the use of such platforms of trade. During the campaign, the Banker AntiBitCoin Coalition (“BABC”) worked tirelessly in hosting many fund raising events for the President. In one such event, the President announced his commitment to ending “all peer to peer” transactional platforms that bypass the central regulatory framework of UCC. He specifically said: “I was a college student in the era of Napster. People stole music because of peer to peer networks. We finally brought Napster down and so we shall now continue to put an end to the DLTs.” The President wants to keep his campaign promise.
(2) Watson Loveshuttles - The President’s advisors have also informed Sofos Tech Stiffler to consider the lobbying efforts of the International Weapons Association (“IWA”), the International Business Association (“IBA”), the Manufacturers of Technology Basics (“MTB”), and many other business groups, which have been consistently funding studies and other research projects that support the idea that DLTs will foster great economic growth in UCC over time. All these organizations have created a legal fund that hired attorney, Watson Loveshuttles, from the law firm of Innovator, 4 Bazouka and Modernio (“IBM”), who will have the opportunity to address the Parliament as it takes up debate of the issue. Attorney Loveshuttles is a leading specialist in the technology sector and the author of several books on deregulation of technology. He supports the idea that UCC should not implement any type of legislative framework on DLTs and has in the past filed several lawsuits against the Government of UCC on the basis of constitutional challenges. His team consists of top experts in the field of DLTs and will have the opportunity to propose commentary in any draft legislation to the Parliament.
(A). In drafting the proposed legislation, Sofos Tech Stiffler shall hire an expert from the Boston Institution of Technology (“BIT”) and/or any other leading scholar on DLTs. The expert shall provide the technical references and guidance so that Sofos Tech Stiffler is able to fully understand the complexities of DLTs and also to assist him in formulating public policy objectives in the draft legislation.
(B) The Model Law proposal shall include the proposed law but also clear and convincing arguments for its adoption by UCC’s Parliament in its upcoming session.
(C) Attorney Watson Loveshuttles will also utilize expert opinion that will assist him in identifying areas of agreement in the proposed legislation or specific recommendations that support his clients’ interests in preserving a legislative free environment in UCC for the innovation by various forms of DLTs. He supports innovation through competition in an open environment and will argue against any form of regulation of DLTs.